TOKYO – In a hopeful turn for global markets, Asian shares saw gains on Monday as oil prices took a significant dip. This shift followed U.S. President Donald Trump’s announcement that peace talks with Iran are making headway.
In Japan, the Nikkei 225 index made a notable leap, rising 3.1% to reach 65,321.56 during morning trading. Similarly, Australia’s S&P/ASX 200 experienced an uptick, climbing 0.4% to 8,692.70, while China’s Shanghai Composite Index also showed a modest 0.4% increase, landing at 4,127.53.
Markets in South Korea and Hong Kong remained closed due to the observance of Buddha’s birthday. Meanwhile, the United States market will pause trading on Monday in recognition of Memorial Day.
President Trump described the dialogue with Iran as “orderly and constructive.” In alignment with this, regional authorities informed The Associated Press on Sunday that the U.S. is nearing an agreement with Iran aimed at concluding the war, reopening the strategically crucial Strait of Hormuz, and Iran relinquishing its stockpile of highly enriched uranium.
The potential reopening of the Strait of Hormuz is pivotal for oil prices globally. Its closure has hindered the movement of oil tankers from leaving the Persian Gulf, affecting the global oil supply chain. For Japan, which relies heavily on imported oil, predominantly transported via this strait, the resolution could be particularly impactful.
Stephen Innes, an analyst, highlighted the market’s shift from fear to optimism, commenting, “Markets are rapidly transitioning from pricing geopolitical fear toward pricing a potential peace dividend as Hormuz reopening expectations pressure oil and the dollar lower.”
Early Monday, benchmark U.S. crude was down $4.35 at $92.25 a barrel. Brent crude, the international standard, sank $4.16 to $99.38 a barrel.
In currency trading, the U.S. dollar declined to 158.80 Japanese yen from 159.16 yen. The euro cost $1.1641, up from $1.1605.
Friday On Wall Street, stocks finished their eighth straight winning week, the best such streak since 2023. That’s even though a survey showed U.S. consumers are feeling even worse about the economy.
The S&P 500 added 0.4% and pulled closer to its all-time high set in the middle of last week. The Dow Jones Industrial Average rose 0.6%, and the Nasdaq composite gained 0.2%.
Recent earnings reports from U.S. companies that topped analysts’ expectations also helped markets. But worries about inflation have pushed bond yields higher worldwide.
The yield on the 10-year Treasury edged down to 4.56% Friday from 4.57% late Thursday, but it remains well above its 3.97% level from before the war.
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AP Business Writer Stan Choe contributed to this report.
Yuri Kageyama is on Threads:
